1. PROJECT LAUNCH DOCUMENT
  1. BENEFITS SIGN OFF

Project Title:Balconies support and remedial works framework

Author / Max Padovano
Version / V 1.0
Date / 17/03/2017
Version / V 2.0
Date / 23/03/2017
Section / Topic
(I) / Purpose of this document
(II) / Project Summary
(III) / Approvals Obtained
1.0 / Project Overview
2.0 / Defining the Need
3.0 / Roles and Responsibilities
4.0 / Contract Analysis
5.0 / Analysis of Current Situation
6.0 / Establishing Baseline Costs / Spend
7.0 / Social Value Act (SVA) considerations
8.0 / Strategy
9.0 / Forecast and Actual Benefits
10.0 / Forecast Timeframes
11.0 / Transition
12.0 / Lessons Learnt

I - Purpose of this document

This document provides a consolidated view of how the project team intend to approach this sourcing project and what the respective benefits are.

From a planning perspective it summarises:

  • The project scope, aims and objectives;
  • Forecast benefits and baseline expenditure;
  • The strategy for delivery of those benefits;
  • Timeframes, risks, roles and responsibilities.

And following delivery, the applicable sections shall be updated to reflect:

  • The actual benefits achieved against the agreed approach;
  • Stakeholder commitments resulting from procurement activity;
  • Stakeholder approval that benefits stated are accurate.

(All sections shaded in red shall be completed post-delivery. All other sections should be completed to form the Project Launch Document, prior to commencing procurement activity)

II - Project Summary

PLD (Forecast) / Benefits Sign Off (Actual)
Max Padovano / Sourcing Lead
Open - Framework / Market Engagement Approach
(Open, Restricted, Negotiated, Competitive Dialog, Exemption, Other)
£8M~ / Anticipated Contract Value / £
4 Years / Anticipated Contract Duration
(number of years)
N/A (HRA only) / Total Sourcing Savings
Over the life of the contract
(against anticipated or agreed baseline) / £
N/A (HRA only) / % Saving
(against anticipated or agreed baseline) / %
October 2017 / Enablement Date
Yes / Stakeholder Endorsement Included / Yes
Non-Financial Benefits / Yes

III- Approvals Obtained

This section only needs to be completed by ‘approvers’ that are directly involved with the delivery and who are part of the integrated SCC/Capita procurement project team. Once approvals have been obtained, formal and final submission of this PLD will be presented to the relevant Service Director, CFO and SRO who will physically sign approval on Page 1.
Approver’s Name / Service Area / Project Activity / Date
Mel Crieghton / SCC Finance / Financial approval
Simon Collison / SCC Legal / For Information / comment
Neville Tomblin / Service Lead / Service Specification / evaluation

1.0 - Project Overview

Include a summary of the background, key objectives, forecast benefits, description of scope, key acceptance/success criteria/ outcomes sought and refer to wider business strategy or programme if applicable
SCC required to establish a compliant procurement vehicle for the provision of the Balcony Repairs services. One of the current arrangement has been halted due to the inability of one of the current supplier to provide such services. CLC continue to deliver the service for the 2 Storey Walkup Balcony but under restrict interim arrangement.
SCC will seek to set up own Framework Agreement covering all balcony Repair works requirement over 3 Lots with the ability to appoint up to 3 Contractors in each Lot.
Lot 1 consists of work to Private Balconies to 11 Blocks of 3 & 4 storey flats, Lot 2 consists of work to Walkway Balconies and Private Balconies to the 2 Storey Walk Up Blocks at 18 Supported Housing Schemes and Lot 3 consists of work to the Walkway Balconies to 34 Blocks of 4 & 5 Storey Flats, Legal has already deny the use of MTC contracts in view of the Design work required by the contractors which are deemed to be Non compatible with a MTC type of contract.
Key exclusions to the scope (explain any notable exclusions)
N/A
Key variances from the Request for Contract
N/A

2.0 – Defining the Need(to be provided by the SCC Service Area

Under Best Value legislation you must consider the options for the delivery of the required supplies, services or works. To ensure that the need is defined and articulated effectively it will need to be stated in the PLD and address the following 5 key questions:
Acid Test questions / Response Rationale
Why do you want to go ahead with this procurement? Do you really need to go ahead with this procurement? / Structural investigations have identified that the balconies have suffered severe structural deterioration and the work is need to support the balconies and avoid the possibility of a balcony collapse.
Does it have to be to this specification? Why isn’t “fit or purpose” good enough? / The design is of a specialist nature and needs to be specific, “fit for purpose” would not cover this.
Why does the service have to be delivered this way? / The work covers a large number of blocks across the city that need to be delivered either via an MTC or Framework. Because of the “Contractor Design” element of the works Legal have stated that this cannot be dealt with as an MTC
If the procurement has to go ahead and specification/service design issues have been resolved then can we group with other procurements or rather why can’t we group with other procurements? / This work is of a particular nature that does not link with other procurements and in fact has been put together with 3 separate types of balcony support work to maximise leverage on spend
Can we group our procurements with other Councils to leverage our spend or why can’t we group our procurements with other Councils? / See above. Also at the moment there are not similar projects with other local councils although Gosport Borough Council & Fareham Borough Council both have a number of cantilever balconies and are in the process of investigating their structural stability

3.0 –Resources and Responsibilities

Resource Area / Name / Estimated amount of activity required (Hours or Days) / Role within Project (spec definition, evaluation, customer etc.)
Capital Asset / Tony Rainsley / Cost manager, specification, tender documentation
Capital Asset / Neville Tomblin / Project Lead & Budget holder, Specification
Procurement / Max Padovano / Tender Documentation, Compliance, Procurement process

4.0 - Contract Analysis

Supplier name / Scope of contract / Expiry Date / Notice period / Exit considerations (e.g. TUPE)
Keepmoat / Provision of Balcony Refurbishment services / 01/10/2018 / 6 months / This MTC contract will reamin in place, but no further orders will be issued by SCC by agreement by both parties

5.0 – Analysis of current situation

Internal Status: Describe the nature of the current supply relationships (incl. nature of relationship, performance of suppliers, what works well, what doesn’t, what’s missing, how are suppliers treated and the work competed or not etc.)
The overall project consists of 3 Lots within which one of the Lots relates to the structural support of the walkway balconies on 2 storey walk up blocks. This Lot has previously been the subject of 2 tender processes with R R Richardson, the contractor appointed after the first tender process going into liquidation during the course of the contract and Keepmoat Ltd, the contractor appointed after the second tender process following this liquidation requesting that they are issued no further orders under the MTC Contract after a period of 15 months of the contract. In both cases the contractors failed to fully appreciate the nature and complexity of the work and substantuially underpriced the tenders.
Following the failutre of R R Richardson, and whilst a new contractor was procured, an interim arrangement was put in place with CLC Ltd, the contractor who undertook the pilot project. This arrangement continued to run in parallel with Keepmoat while Keepmoat’s progress was monitored. The arrangement with CLC continues and will continue until a new contractor is appointed under this tender.
CLC have demonstrated a full understanding of the project and its complexities and have continued to deliver in quality, time and cost as well as excellent resident satisfaction.
In order to assess any new contractor as part of this new tender process, there needs to be a very robust set of quality questions and in depth investigation as part of the clarification process to ensure that any contractor under consideration has fully incorporated the risks and complexities within their tender price.
Whilst the other 2 Lots are different, they both involve the permanent supporting of structurally failing balconies and will therefore need the same due diligence prior to any appointment following receipt of the tenders.
External Market Analysis: What factors are currently influencing the industry? What is the size of the market and level of competition amongst buyers and suppliers? Who are the high performing players we want to attract and why? What pricing mechanisms are commonly used? What leverage, opportunities and risks do we face? What are others councils doing in this area?
Construction Output
Construction output can be broken down by different types of work, these are categorised into new work, and repair and maintenance as shown in Figure 1. The graph shows that through to mid-2014, new work, and repair and maintenance followed a similar pattern but since reaching a level peak in August 2014, repair and maintenance has slowly contracted. Over the same period, new work has continued to increase steadily, largely down to a rise in new housing work.
The slight decrease in all work in January 2017 is mainly driven by the large decline in repair and maintenance of 1.3%. In comparison with the same period in the previous year, repair and maintenance has fallen 0.7%. This downward pressure on repair and maintenance is due to a 1.1% decrease in housing repair and maintenance and 1.6% decrease in non-housing repair and maintenance.
This fall is offset somewhat by an increase of 0.1% in all new work in January 2017 and 3.4% in comparison with the same period in the previous year. It is worth noting that all new work accounts for approximately 66% of all work, while repair and maintenance accounts for approximately 34%.

Figure 1
In January 2017, construction output fell by 0.4% compared with December 2016. This negative month-on-month growth comes in the wake of 2 consecutive months of strong growth in the last 2 months of 2016, driven mainly by falls in repair and maintenance. Despite this, construction remains 2% higher in comparison with the same period in the previous year.
Despite construction falling month-on-month, in terms of the rolling 3 month time series, construction output actually grew by 1.8%, in part due to strong infrastructure and housing growth.
Figure 2 shows the difference in month-on-month volume from the different sectors in terms of growth. Housing as a whole has provided the most notable downward pressure on growth, with both public and private housing, as well as housing repair and maintenance falling month-on-month in January 2017.
However, this has been offset somewhat by marked positive growth in 2 sectors. Infrastructure exhibited the most notable growth in terms of volume in January 2017, rising for the third consecutive month, increasing by 3.5%. Public other new work also provided upward pressure on output, recovering from negative growth in December 2016 to grow by 4.1% in January 2017.

Figure 2
Despite falling month-on-month in January 2017, the 3 month on 3 month rolling picture was more positive, with only private industrial, and non-housing repair and maintenance experiencing negative growth. Most notably, infrastructure, and private housing repair and maintenance continue to sustain strong 3 month on 3 month growth, increasing at rates of 4.0% and 5.4% respectively. Only private industrial work, and non-housing repair and maintenance provided downward pressure on 3 month on 3 month growth.
In regards to month-on-year, output has experienced strong growth at a rate of 2.0%. This has been driven by private new housing, which grew 7.4%, as well as private housing repair and maintenance, which increased by 9.7%. However, public housing provided some downward pressure on the growth rate, with public new housing falling 1.2% and public housing repair and maintenance falling by 13.1%. Despite recent growth, infrastructure has still fallen for the 13th consecutive month-on-year, at a rate of 0.7%.
Repair Sector
The size of the UK concrete repair sector is estimated to exceed 3% of the entire construction industry. Unplanned maintenance and refurbishment work forms a significant proportion of this. In many cases concrete repair is done in an unstructured way, often resulting in inappropriate repairs that require further, premature repair.
Steel rebar embedded in concrete is prevented from corroding in most circumstances by the formation of a protective passive layer or film on the steel surface, which is maintained by the highly alkaline environment of concrete. However, if the concrete becomes contaminated by chemicals that disrupt the protective layer or reduce the concrete’s alkalinity, the steel is prone to corrosion if moisture and oxygen are present. This leads to cracking and spalling of the concrete covering, requiring repairs

6.0 – Establishing Costs / Spend(to be provided by theSCCFinance and Service Area)

Establishing Baseline Costs / Spend: populate the fields below for each incumbent supplier(s) that is in scope of the review.
Supplier name / Historic Annualised Spend * / Forecast Annualised Spend / Source of data / Assumptions and Notes / In scope
R R Richardson / £420,000 / Nil / Agresso / Yes
Keepmoat / £625,000 / Nil / Aggresso / Yes
Yes
CLC / £3,000,000 / £3,000,000
Total in scope
Total out of scope / £N/A / £N/A

*To be taken as the baseline for savings calculation unless otherwise agreed in this Project Launch Document.

Cost Transparency: Provide further detail about how costs within scope are broken down. Insert graphs and graphics or an Excel spreadsheet as required where these help illustrate transparency of costs.
n/a

7.0 – Social Value Act (SVA) Considerations (to be provided by the SCC Service Area)

How will this procurement project:
Create employment and training opportunities for local people, including NEETS and increasing the numbers of apprentices in employment locally? / Tender returns will include a requirement for NEETS, apprenticeships and local employment
Address the issue of worklessness by providing local training opportunities and job opportunities? / Tenderers will be required to indicate training and job opportunities for local employment
Reduce unemployment and raise the skill level of the local workforce? / As above
Develop local people and communities? / As above
Raise aspirations and outcomes for local young people? / As above with apprentices
Protect the environment, minimising waste and energy consumption, as well as using other resources efficiently throughout the supply chain? / Where possible recycled materials will be used and waste will be segregated into non-recyclable and recyclable waste and the amount of recyclable recorded
Who has been consulted in order to help shape this procurement from an SVA perspective e.g. voluntary and community sectors, potential providers, interested parties, etc.? / This is necessary work due to structural integrity issues, but Residents and Leaseholder have been kept fully informed and advised

8.0 - Strategy

8.1 - Analysis of Options (including Demand Management considerations)

OPTION 1 TITLE: Do Nothing and continue with the interim contractor / Recommended? / No
This is not a viable option due to the overall volume of works and compliance with procurement rules
Key Pros / Key Cons & Mitigations
  • The current interim contractor has a full working knowledge and understanding of the project and type of work, including the complexities of the work and is currently delivering the work to a high standard, at agreed costs and on programme.
  • Relationships has been established between end users and suppliers
  • Eliminate Property costs in relation to the procurement of a new solution
/
  • To continue with the existing arrangement would mean that current procurement process would be in breach of EU Procurement Directives and the Public Contracts Regulations 2015 and SCC Contract Procedure Rules.
  • No spend leverage
  • No strategic oversight

OPTION 2 TITLE: Tender as 3 separate tenders / Recommended? / No
Procurement solution for 3 different tenders to cover specific demand for balcony repairs providing permanent support to failed balconies of different construction.
Key Pros / Key Cons & Mitigations
  • Each Balcony repair type tendered individually as standard JCT Tenders and 2 of the Lots would fall outside of OJEU parameters.
/
  • 3 separate tenders will potentially not deliver value for money and could be a fragmented approach.
  • Addition resources and associated cost would inpact negatively within the allocated budget.

OPTION 3 TITLE: Open Tender as an MTCcontract / Recommended? / No
Tender all service provision of Balcony Repairworks on the basis of a JCT MTC Contract with Contractor Design.
Key Pros / Key Cons & Mitigations
  • A simple contract to administer and individual orders placed for each scheme/block based on the MTC Schedule of Rates.
  • SCC would control the release of orders based on the competence of the contractors
  • As a combined MTC covering all 3 Lots, Value for Money should be achieved
/
  • SCC Legal have advised that the JCT MTC Ciontract does not have a “Contractor Design” element and that the contract would therefore have to be amended to incorporate this element which is contrary to SCC procedures.

OPTION 4 TITLE: Open Tender as a Framework / Recommended? / Yes
An overarching framework covering all balcony Repair works requirement over 3 Lots with the ability to appoint up to 3 Contractors in each Lot
Key Pros / Key Cons & Mitigations
  • A Framework Contract would comply with SCC Legal requirements and would incorporate the “Contractor Design” element
  • A simple contract to administer and individual orders placed for each scheme/block based on the tendered Schedule of Rates.
  • SCC would control the release of orders based on the competence of the contractors
  • As a combined Framework covering all 3 Lots, Value for Money should be achieved
/
  • Poor tender response and no suitable contractors due to the specialisation of this type of work.

8.2 - Building on the recommended option